John Textor Made $16 Million In 2011 While Digital Domain’s Revenue Dropped

Students will soon be racking up huge amounts of student loan debt while their money lines the coffers of vfx studio Digital Domain, but at least one person is doing well financially: Digital Domain CEO John Textor (pictured left). Digital Domain released its 2011 annual report yesterday, and it turns out that the man at the center of Digital Domain’s “pay-to-work” scandal is profiting quite handsomely, to the tune of $16 million dollars in 2011. Textor’s pay package included a salary of $791,372, a bonus of $407,000, shares through a stock exchange worth $6.5 million and a penny-a-share option award worth $2.5 million. Textor also received options with an exercise price of $9.63. Digital Domain will report the value of those options at $5.8 million. On top of the $16 million he received last year, Textor also owns 25% of Digital Domain, a stake worth $59 million.

Surely, stockholders are paying Textor handsomely because of the wealth he’s bringing into the company. Oh, wait…hang on…Digital Domain’s revenue dropped between 2010 and 2011? According to the Palm Beach Post, “For the full year, Digital Domain reported a loss of $141 million on revenue of $99 million, compared to a 2010 loss of $42 million on revenue of $105 million.” To put this into perspective, Time Warner chief executive Jeff Bewkes received total compensation of $26 million in 2011 for running a company that reported a profit of $2.9 billion.

It’s only fair to let Textor have the final word. His bizarre rationale for earning that much money is that he didn’t actually earn that much money. Textor told the Palm Beach Post, “Received shares in a company I started? I don’t really call that compensation–the accountants do.”

Never mind the fact that the accountants call that compensation because they’re legally obligated to do so, or that the rest of the business world also acknowledges such options as part of executive compensation packages. With a warped world view like this, it’s becoming become clear why Textor doesn’t think there’s anything wrong with making students pay to work at his company.

When he states that the “Vfx model is broken” he’s correct.. And it’s because of idiots like him at the helm. How can any company be profitable, or stay afloat for that matter when you’re paying this Douche all the money that comes in?

PLEASE somebody knock this man off his pretentious pedestal.

BOYCOTT DD, TRADITION STUDIOS

If you read that financial report… You’ll also see that Digital Domain has interests in building a studio in CHINA and ABU DHABI… So all that horseshit about how raping students is actually Textor helping the American economy, and keeping jobs here in the good old US-of-A is CRAP.

The man is a fraud.

Anyone else find it odd that “Tradition Studios” is formed as a separate, third-party entity, away from Digital Domain? Its that separation that will protect Textor’s millions when that studio goes belly up. Won’t cost him a cent.

Hollywood animation chick

FYI, Sony did the same thing for their company when they started Sony Pictures Animation. Even though it shares the same lot as Imageworks, it is considered a separate company even with its union laws. Fox did the same for Blue Sky. It’s just standard business practice. Yes, probably to cover their ass if the whole thing falls through, but they’re definitely not the first to do it.

Jessica Lohse

And it definitely needs to stop here.

anonymous

How is this legal?
Students have no way of protecting themselves and the university is completely unethical.
Is this legal?

Industry professional

This is legal because it is just an internship that is built into a curriculum through an accredited program at FSU. It is legal to offer school credit as compensation for an internship. Florida is not union, so it is legal for students to work on their films. Digital Domain is NOT doing anything illegal.

If you want change, figure out how to make for-credit internships illegal or get Florida unionized. Don’t boycott a studio full of hardworking artists, even if their CEO is making a business decision you don’t agree with. Do you really want to be competing with 400+ seasoned industry professionals for a job if those artists lose theirs?

anonymous

…says an artist from Digital Domain…

BOYCOTT DD, TRADITION STUDIOS

by the way, there’s no where near 400 employees at Tradition right now. More like 40.

Rinaldo

One of the reasons I have a problem with this, and hasn’t been mentioned, is the fact that the classes Digital Domain offers aren’t covered by Financial Aid if you don’t go through FSU’s program. Not to mention the 10-week courses that are being offered for $9500 and yet you only get a certificate with no guarantee of employment afterwards.
I have a feeling that this is how the studio plans to cover most of their costs, considering that one group of 40 students would bring in $380,000.

Milo Thatch

To be fair, “only a certificate and no guarantee of employment” is essentially how most educational structures are run. I can’t think of many industries where your certificate/degree absolutely guarantees employment. The VFX industry is impossible to hang that claim on, even for schools like CalArts or Ringling.

All the current online schools (Animation Mentor, iAnimate, AnimSchool, etc) are set up on the certificate model. But they DO offer financial aid (at least AM does, I know for sure) and to my personal experience, they try their very best to educate their grads on how to apply, where, when, and encourage them to keep pushing their skills to rise above the competition. That’s about as much “guarantee” as anyone can get in this industry!

But aside from all of that… Yes, boycott DD and Tradition Studios!

Ringling Grad

Ummm that shows a huge lack of knowledge, Boycott DD Studios. I have a couple of great friends that I graduated from Ringling with that work there, and through them I know that the company is currently employing well over 300 people. Could be 400. I don’t know for sure. But it is definitely not just 40. There are employees there working on Tembo, Visual Effects, and some Stereo Conversion. Lots of people down in Florida.

http://www.animationinsider.net/ Aaron B.

Regarding the financial losses, the financial statement is a snapshot, as many of them are. The increased debt reportedly “reflects an increase in projected future revenue reflected by feature film contracts that [Digital Domain] are either currently working on or have been awarded by customers.”

I’m not defending a guy who wants to use students to make his movies for him, I’m just saying that it’s part of the spend-money-to-make-money model. Some projects studios invest in are cancelled, and you have to write off all that cash. Some projects require a lot of employee training, and you essentially “lose” money in the process because they aren’t immediately contributing to the product. These challenges aren’t exclusive to Digital Domain, obviously, but it’s worth pointing out that the company is claiming these decisions/practices are among the contributors to the stated losses.

Isaac

Would you stop the personal attacks against John Textor? The guy might be a scumbag, but that doesn’t mean you should be a scumbag too.

http://www.cartoonbrew.com/author/amid amid

Cry me a river, Isaac. When someone is making tens of millions while exploiting students, then pointing out how he’s profiting using facts from a company’s annual report is fair game.

Rick R.

I will agree the guy sounds like a pure con artist, and Amid, I heartily applaud your efforts at exposing all this. However, the cosplay pics you are using are undercutting your seriousness. I realize he posed for em, no arguments there, but while I disagree with Isaac’s wording, I would agree with his suggestion about you should taking the high road, particularly with the images.

Robert Schaad

Right. Perhaps something more Scrooge McDuck…counting gold pieces.

matt harvey

Rick R is correct. Halloween photos automatically make me question the validity of your posts/articles regardless of their fact or truth. Perhaps Scrooge McDuck would have been a better choice.

wever

When an exec makes an announcement that Amid is against, he usually Googles whatever silly party photo he can find of him and posts it on his article, as if that’s how he/she usually is!

Mike Luzzi

Excellent reporting, Amid. Keep this story in the headlines.

Jaster

My favorite part about this whole ordeal is how apparently no photos exist of John Textor except for ones taken at Halloween parties.

Pedro Nakama

WOW! You think with that kind of money he’d have better Halloween costumes.

Didn’t Digital Domain try to go on the open market in the mid to late 90′s? They sold shares or something to the employees working there and then everything feel through. Has the FTC ever investigated this?

Ryoku

This is the sort of stuff that you see in movies all the time, who knew that something so screwy would work?

If I did something like this I wouldn’t have the heart to suck-up all of that cash, I’d just tell the kids “sucker!” and let them learn and work for at least minimum wage.

The whole idea of “pay to work for me” goes against the basic concept of capitalism, that all humans are self-ish.

Jason H

Actually the whole ‘pay you to work’ is completely capitalist. Capitalism just means maximizing profit with little care of a anything else.

Face

I can’t believe in this day of knowledge people still think they CAN defend capitalism like the dumb info-starved war-mongering zombie generation previously.

Wake up! Contrary to the propaganda you’ve been influenced by all your life. Admitting one’s ways were wrong and making amendments is NOT a sign of weakness. Greed is NOT good, for ANYBODY.

This kind of capitalism (born and bred in good old USA) is ruining not just the US but the whole MOTHERFU%^ING PLANET.

Jessica Lohse

Unregulated it is a monster, which is why the government should be brought to bear just as much as those exploiting the law in huge corporations. Don’t blame capitalism, blame apathy.

Senor Verde

I’m very opposed to what DD is doing, but I don’t think the emphasis should be on shutting them down or boycotting them (which is what some might rightfully wish to do). I’m more interested in educating students about the scam-like quality of the whole enterprise. Some have equated this to a form of slavery. To me, that is preposterous. No one is MAKING the students go to school/toil there. There are plenty of other great schools with partnerships in the industry that students can choose from. If students really want to stand out, make a film of your own! Also, a lot of schools require industry internships for graduation, so opportunities to pair work and learning will come anyway.

The larger issue here is that there is such hunger among students to break into the industry at all costs as opposed to just going to school and soaking in the education, building a good body of work through dedication, and finding their own way. “Connections” and people’s drive to attain them should not trump learning and student development. When a studio like DD dangles the carrot of “working on a feature” it proves irresistible for many of them who don’t know better.

Jorge Garrido

I have a question for EVERYONE who’s reading this: While Textor’s solution to the problem of cost wars within the industry is obviously stupid, is he right that the industry is broken? It seems so to me.

Michael Porter says the key to an effective corporate strategy is NOT operational effectiveness, which is basically competing on qualitative measures (like low-cost, which result in a price war of attrition,) but to perform unique activities in a unique way. What unique activities could a firm perform that would prevent it from being drowned under the pressures and realities of the low cost battle in animation, where you’re trying to bid for jobs at the lowest cost?

And how can we fix the way animation is taught? I think the apprentice system should be brought back, so yu get paid to learn but still your work gets used in the final product.

You could organize the union according to apprentice, journeyman, and master. This would take out the entire school infratructure.

A Writer

This is bad for Tradition Studios. I mean Florida basically paid for that studio in exchange for 400 jobs and then bam this happens. Any real animator isn’t going to want to work there. Only the ones that don’t have a clue about the roots of animation and no respect for the artform except they want to “animate megatron and it looks cool!” and all Tradition studios is going to be left with is a carcass of a studio, movies with really bad animation made bye animation studios that don’t know crap about how animation really works.

I mean “The Legend of Tembo?” really? sounds like a direct to dvd disney rip off

Milo Thatch

To be fair, we don’t know a lot about “Tembo” yet to truly judge its merits. But yeah, the earliest of story/art released don’t seem to be offering anything fresh to an already muddy and redundant industry.

Mark R.

Here’s video of a lecture with a synopsis for their upcoming project –

Seems like it just more of the same CEO salaries are out of control. And no one has the b@lls to do anything about it. I hope one day that laws, unions and yes even stockholders will put and end to all this nonsense.

Skip

Walt Disney will always be the King of Animation, and John Textor is Animations biggest Douche.

Dude

The stock IPO is just a pump-and-dump plan for the executives. He’ll be gone in a year if DDMG gets above $x.

Glenn_G

If they plan on having these students work on a for-profit feature, they have to be paid.
US Dept. of Labor, Wage and Hour Division – Internship